Home > Jay Bookman > Archives > 2008 > June > 19 > Entry
DEL.ICIO.USThe oil-drilling solution
The Atlanta Journal-Constitution
We’ve gone over this before, but since it seems to be taking on new political importance, let’s review:
Would opening the Arctic National Wildlife Refuge and other coastal areas to oil drilling have any effect on gasoline prices, as many politicians claim?
No, it would not. For one thing, oil companies already hold a backlog of leases on offshore areas that they haven’t begun to tap, in part because of a global shortage of drilling equipment. They face no shortage of domestic areas waiting to be exploited.
On the other hand, it’s true that drilling technology has improved, and that environmental risks of offshore drilling are much lower than a generation ago. So we probably could begin to assess on a case-by-case basis whether to someday open areas now off-limits to drilling.
However, that would not lower gas prices and it would not alter our basic strategic energy situation. Here’s why:
Take ANWR as an example. Many Americans would be surprised to learn that oil produced from ANWR would be sold to Americans at whatever the global price for oil happened to be. There’s no “hometown discount” - U.S. consumers would pay 100 percent of the global price for ANWR oil, just as we do today for oil produced from Alaska, Texas or the Gulf of Mexico.
That’s because all oil produced in this country goes into the world oil market. All oil sold in this country is bought off the world oil market. The only way to change that would be to nationalize our oil industry.
So there’s only one way that opening ANWR and other areas could lower the price of gasoline here in the United States: It would have to put enough “new oil” on the global market to drive down the price of oil worldwide.
A newly released study by the federal Energy Information Administration says that simply would not happen. According to the EIA, if drilling began in ANWR this year, oil production from that region would peak around 2027-2030. At peak production, ANWR would produce enough oil to lower the world price of oil by about 1 percent.
So if gasoline is selling at $5 a gallon in 2030, that would amount to 5 cents a gallon.
That EIA prediction has actually been confirmed recently in the oil markets. Saudi Arabia has announced it would increase production by 500,000 barrels a day. It sounds like a lot, but it isn’t. Not when you consider total world consumption of about 85 million barrels a day. So it’s no surprise that the Saudi announcement has had no discernible impact on world oil prices.
Furthermore, the EIA predicts that as ANWR oil came on the world market, OPEC would simply cut back its own production, thus keeping the global oil supply - and the global price - unchanged, So in the end, drilling in the wildlife refuge and offshore areas would have little or no impact on oil prices. It is a false hope.
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Comments
By TopCat
June 19, 2008 12:07 PM | Link to this
So I am the only person who stayed awake long enough to(yawn) reply to this tired out old yarn….zzzzzzz
By ByteMan
June 19, 2008 12:11 PM | Link to this
Jay,
You forgot to mention two things that the proponents of drilling in the arctic region fail to mention:
Even if ANWR drilling was approved TODAY and leases were approved TODAY, that it would take 8-10 years before the oil would make it to market. It’s not like drilling and building pipeline to a remote mostly-frozen area is as simple as drilling in your backyard. So much for it helping the price of gas or other oil-based products any time soon.
That it’s about 100 miles east of Prudhoe Bay, where we’re already piping out oil… but the rate of oil being produced from Prudhoe Bay is declining and will likely go dry in the next 10-15 years. At best ANWR is a “push” when it comes to increasing global supply even if the Saudis do absolutely nothing either way.
But here’s a scary thing to contemplate: we get about 14% of our oil from Mexico, which is currently a net exporter of oil. However, Mexico’s ability to pump oil is declining. Current estimates by people who study this stuff has Mexico becoming a net IMPORTER of oil in about 6-8 years.
We really do need a new nationwide transportation plan implemented in the next 10 years. Just as the combustion engine and the automobile put horses out to pasture and the inexpensive computer helped push a lot of low-wage workers out of the economy, expensive oil is going to mutate our economy in lots of uncomfortable ways.
Better to get out in front of the coming wave.
By Abomi Nation
June 19, 2008 12:55 PM | Link to this
Jay, there has to be a way for the Bush lovers to understand what you are saying. They don’t speak common sense and need a translation into a language they can understand. If you can re-write your column in the language of Sloganish they might understand. Example….
If we drill Over There, so we don’t have to drill Over Here, we will still not be able to say Mission Accomplished when it comes to lower oil prices.
We are in the Last Throes of cheap oil. We Have Turned The Corner, but have run out of gas. The Surge (in oil prices)Is Working against us.
As the Saudis stand up, our economy will Stand Down.
The Iraq War Will never Pay For Itself With Oil Revenue.
If we Stay the Course we will run out of oil.
By Mikee
June 19, 2008 1:17 PM | Link to this
Do the Bush family and associates stand to make a lot of money from the opening of ANWAR?
By Ricky
June 19, 2008 1:26 PM | Link to this
OK, then, nationalize the oil industry. Fine with me.
By Hillbilly Delux3e
June 19, 2008 1:29 PM | Link to this
No matter how much oil there is or where it’s at it is a finite resource. It’s long past time we started trying to develop something else for the long term.
By Slick
June 19, 2008 1:57 PM | Link to this
Jay, Your analysis of the “to drill or not to drill” question is right on the mark. The additions of Byte Man and Abomi Nation add significantly in terms of elaboration and translation into “Bush speak” (read: Dumb down).
It is almost painful to watch Republican politicians scramble for a quick, simple solution to a very complex problem, and a farther translation into “Bush speak”…Drill, Drill, Drill!
It also demonstrates that they do not have a clue concerning how to react to high gas prices. A wise man once said “for every complex problem, there is a solution that is simple, quick, and WRONG!” Republicans are proving that this is still true - but it is no way to govern!
By tom
June 19, 2008 2:01 PM | Link to this
Who would have ever thought that Suguar Cane could meet a nations transportation needs, namely Brazil.
Potatoe ethanol could rival sugar cane if we utilized the millions of acers accross our county grow potatoes. The Discovery channel disclosed that this approach would work!!
Yes we need oil now. But why not take a serious look at a renewable energy that would be considerably inexpensive.
By hillbilly ragger
June 19, 2008 2:02 PM | Link to this
Hey, nice piece, Jay.
You’re getting pretty good at this blog-thing.
By Bosch
June 19, 2008 2:16 PM | Link to this
I’ll say it again! We should find ways to convert body fat into fuel - we’ve got plenty of that around, we could give tax breaks for liposuction.
Think about it people!
By Bud Wiser
June 19, 2008 2:26 PM | Link to this
If drilling had started when Democrat Jimmy Carter, everyone’s example of a true Georgia-grown moron-made-good, we would not be having this discussion now.
Had Democrat Bill Clinton not put the moratorium on offshore drilling, exhorted by Green Al Gore, we would not be having this discussion.
Had one single automotive “expert” in Detroit matched or exceeded the Japanese car makers with a quality high mileage product, when they soaked our markets with them, thanks to Ronald Reagan, we would not be having this discussion right now.
And, I like Bosch’s idea of converting body fat into fuel. Hillary’s legs could potentially be converted into fueling a fleet of Hummers for a year!
By Joe Lauterbach
June 19, 2008 3:40 PM | Link to this
The notion that we can’t “drill our way out of this mess” is lodicrous! If the congress would get out of the way of “the evil oil companies” they would drive the price down as far as they could. The same logic is used to try and prove tax cuts reduce the amount of money to the government. Or that increasing taxes will increase dollar flow to the government. All of the stated “statistics” here rely on a static economy that believe that people and buisness wil do the same things given different disincentive taxing policies. They have been historically abissmal at prediction to the point of being 180 degrees wrong most of the time. The biggest problem I have is the democrats promissed in 2006 to relieve us of the pain at the pump. So where is the relief plan? If they think the oil companies are going to stand for them confiscating there meager profits (return on investment) they are more stupid than the dolts that believe these liers and fools. How about if we make the polititians take thier stranglehold off the american economy and believe as I do that Americans will find the best way as long as bureaucrats and environmentalists, get out of the way or best case work with buisness to bring the best technology to bare on the problem.
By josh
June 19, 2008 3:54 PM | Link to this
mr lauterbach- maybe try using spell check before you go on your incoherent rants.
By JayBird
June 19, 2008 3:55 PM | Link to this
Yes, I read this rubbish and can only think that this is someone who really liked Jimmy Carter and never learns much from the past!
Could you please explain how not being in control of ones assets is a good thing? Did Jimmy not teach us anything?
Could you please explain how not being drilling makes perfect logic for the future given the same logic of not drilling in the past either? So lets be remembered for not not doing the right things then and now Because our children will benefit?
By Skeptic Tank
June 19, 2008 3:56 PM | Link to this
Please note the absolute dearth of factual rebuttal from the right-wingers on this subject. Once again, they want to obfuscate the truth with their unmerited finger-pointing, cajoling us to “Drill Now!” without taking into account the utter uselessness of doing so. A recent GAO report echoes precisely what Jay is telling us…a report sanctioned by the Bush administration, folks.
By Steve
June 19, 2008 3:58 PM | Link to this
Great blog, Jay. You summed up the facts, nicely. Just don’t tell the Faux News sheeple these kinds of truths. They might have to just question why their favorite pundits are pushing (big oil money) agendas like drilling for oil and making false promises that it will solve this mess. Kudos to Jay Bookman :)
By Fix-It
June 19, 2008 4:11 PM | Link to this
Why not make a “home town discount”? It is really simple; our government puts up the money for the well then sells the crude at $50 a barrel to the refineries. Then sell it ONLY domestically at let say $2 a gallon. There is absolutely no reason that can’t be done; the only thing stopping that is stupidity.
By George
June 19, 2008 4:13 PM | Link to this
No, a proposal that suggested drilling more would not be a workable solution. However, it can be *one part *of a multiple part solution. 1) Reduce. Reduce our consumption of oil. Higher efficiency standards need to be demanded by Congress because we as a nation must reduce our energy consumption (not just automotively). 2) Increase production. Part of the volatility of the oil market is our dependence on a very politically unstable part of the world as our source for oil. If more of the oil this country used was harvested here in a (hopefully) more stable environment, prices would not fluctuate at quite the absurd levels we have seen recently. 3) Research and implement alternatives. Hybrid vehicles are already viable, Hydrogen fuel cell vehicles are close (but not widespread), and ethanol based fuels are use-able, but again, not widely available. We must expand these alternatives to reduce our consumption on, and dependence on, oil.
Drilling alone will not get us out of these dark times, but it can be a useful part.
By Bosch
June 19, 2008 4:16 PM | Link to this
Fix-It,
How’s the government going to get the oil out of the ground? There’s not a Dept. of Drilling - the oil companies will gladly oblige for an inflated fee.
By Tim Gallien
June 19, 2008 4:17 PM | Link to this
What if oil companies wanted to drill in Alaska and the gulf? OK, that’s not really a theory or a question since we all know the answer. Did you know, that the U.S. government makes more in taxes on a gallon of auto gas than the oil company does selling it? The oil companies margin is on average 6%, not bad. The U.S. government takes on average 5 to 8 percent in taxes. So….if oil companies make more money, so does the government. OK, where does the money go? Well, we will forget this question for now. What I am getting at is this. Knowing that oil and government are in the same business, this leads us to real questions. Understand this about humans, because government and corporations do! People don’t change until it becomes too hard to stay the same. So, government and oil corporations say to each other quietly, how do we get the public to let us drill in protected Alaska and gulf regions, so that they as a corporation and government may profit from it? And yes, become more independent from OPEC while gaining more market leverage. They would be freeing themselves from OPEC and dependence upon foreign oil markets. Not us from the prices or dependency. Answer, Make it to harder to stay the same. “Lets just jack up the price, and blame it on speculation, foreign oil dependence, OPEC, the middle east lack of production, fighting terrorism, and Muslim extremists, (also believed to be linked to al qaeda)”. People will demand us to drill our own resources and allow oil corporations and government the authority to drill in Alaska and the gulf. I hope you do not believe that prices will go down after this. The market has seen what Americans are willing to spend on fuel. Since prices are based on willingness to pay a certain price for fuel, the corporations will keep the price the same. The only “benefit” that will come is that “the price of fuel will stabilize”. The people will except this and continue on with life, and forget about it. The main goal of U.S. oil policy is to deplete the oil from foreign sources as soon as possible, so as to eliminate any corporate dependency and governmental control by foreign nations. You might ask, what will we do after the oil is gone, even our own? This is the end game. Today, we have in our possession, technology that that makes fossil fuels a thing of the past. These technologies are free energy, or over unity energy producing. What this means, is that after all of the oil is gone, we (I mean corporations and government) will have the only source of power left in the world that is viable forever. The sad part is, is that we have had this technology for over 100 years. Because the people 100 years ago who were in power, were also very intelligent, they knew that oil was the only cheap competition. They knew that it was a limited resource as well. It was only a matter of time before it would be gone, and that it would be whom of them as corporations to help get rid of it (oil), ie… through government policy, wasteful engineering (cars, SUVs, everything you know), and WAR to maximize profits in all sectors and on both sides for corporate profits as well as to adjust and regulate the long term goals. But its just a theory. Do your homework. Its not politics, its business.
By Bosch
June 19, 2008 4:19 PM | Link to this
Fix-It,
Stupidity and greed. Bush’s oil buddies wouldn’t get any money out of the deals.
By Fix-It
June 19, 2008 4:21 PM | Link to this
It is pretty funny how it seems to be an all or nothing here. We can’t drill our way out of this seems to be the total left hand lie. Who said we could? Drill now means lets develop our own resources so we can stop giving money to people that hate us. That will keep the dollars here, and then develop alternatives with the money that the government steals from us in the process. The more money that goes out of our country the worse off we are. Simple solutions to complex problems are usually the best.
By Bosch
June 19, 2008 4:22 PM | Link to this
Can any of you pro-drillers tell me why the bans weren’t lifted when Congress and the White House was controlled by the GOP a couple years ago?
By Bradley G
June 19, 2008 4:24 PM | Link to this
As someone that normally votes Republican, let me say that it would be hard to dispute any of Jay’s conclusions. I do have a problem with a govt (dems and reps)that “earns” 15% or so in profits at the pump lamblasting oil companies for making @ 4% margin. Also, the Democratic Party idea of taxing oil company profits in an effort to LOWER prices needs a little work, right?
By ByteMan
June 19, 2008 4:34 PM | Link to this
For all the drilling proponents, you really need to learn to read before writing. As Jay said above:
For one thing, oil companies already hold a backlog of leases on offshore areas that they haven’t begun to tap, in part because of a global shortage of drilling equipment. They face no shortage of domestic areas waiting to be exploited.
Opening other areas won’t cure what ails us. We’re not the only consumer in the world and as other people in other lands want more oil to help drive their newly minted middle class, supply will keep getting squeezed until we find another way out.
And there’s really no such thing as “controlling our own resources”, since all oil goes to the highest bidder on a world market. Because of the relative cost of shipping it, a lot of Prudhoe Bay oil goes to Japan, not Seattle.
By Skeptic Tank
June 19, 2008 4:39 PM | Link to this
Bradley G
Both the Democrats and Republicans have used this issue to patronize their constituents. They prey on the ignorance of the masses, and the masses seldom disappoint them.
By Marie
June 19, 2008 4:43 PM | Link to this
Jay:
No one who is a proponent of drilling for oil in the USA is only advocating for drilling in ANWR. However, let’s drill wherever oil has been potentially discovered in the USA including the outer continental shell as well as ANWR. We also need to explore for natural gas, build more oil refineries, use more coal, build more nuclear plants and use every other known form of energy we have right now.
Of course if you only drill in one place you might not bring down the price of gasoline, but, if you use every resource you have available you stand a much better chance of accomplishing that goal.
However, the current policy that Obamacrats support of not drilling, tax the oil companies, and raise the mileage standards on the automobile companies, will not do one thing now or in the future to bring down the price of gas. Which Obama does not want to do — he is happy with the price of gas going up — he just didn’t want it to happen this fast.
GET THIS LIBS!! God gave us all this things on this earth to enjoy including the oil, the coal, and natural gas. Of course we should use it safely, responsibly, and be good stewards of our natural resources. And it is a fact that with the increase of technology we have learned how to mine these resources using the above criteria.
So instead of always whining and worrying about what the potential harm may be in the future for using these resources. Can we hear some gratitude for all the good we have been able to do across this world because of these resources? IS ANYBODY OUT THERE THANKFUL?!!!!!
By jasper
June 19, 2008 4:54 PM | Link to this
You libbies are really showing your government school shortcomings today. Conventional freemarket supply and demand logic does not apply to oil. OPEC, Speculators, and our own federal restrictions on exploraton and refinery capacity move the equation from algebra to calculus. Remember how you struggled with Algebra, and couldn’t wait to get to your journalism class and salivate over another right wing conspiracy.
Anyhoo, opening up ANWR, coastal, and shale exploration will send a strong message to our Arab butcher buddies, and they will lower prices immediately. They’re not the sharpest tools in the shed either.
The Federal Energy Information Administration - are you kidding me? Could it be that this democratic creation is self-serving.
Are we more concerned about a baby caribou stumbling upon a drill site and being traumatized for life, or the young pregnant mother, who because of high gas prices finally decides she can’t afford to have the baby and gets an abortion. I realize you pro-death libbies will have a dilemma here.
And what if it takes 5 to 10 years to have an effect. Alternative energy will still be pursued intently and come to frution, and we will have lessened the death grip by OPEC. This is not that hard. No wonder you libbies want the goverment to supervise your choices.
By Nobama
June 19, 2008 4:56 PM | Link to this
Jay and the Democrats just want us to wrap our Mr. Roger’s cardigans around our shoulder, turn down the thermostat and fight the malaise. Obama will be as big a loser as the ineffectual, weak willed Carter was. The liberal democrats might get a term in office but they forget that the game is about governance not winning the election. They will screw up America so badly that they won’t get another chance for 30 years.
Obama=Carter. Carter=feeble, hairless weenie
By Joe
June 19, 2008 5:03 PM | Link to this
Jay is missing the point. Sending US dollars to foreign countries for oil reduces the value of our dollar. Reduction in the value of the dollar results in a lower standard of living. Additionally, we need the ability to meet a higher percentage of our oil requirements as a hedge against foreign countries reducing oil exports for political reasons.
By Proud to be Liberal
June 19, 2008 5:03 PM | Link to this
GET THIS MARIE - God did not put oil on this earth for us to kill each other over! Obviously, there is a strong sense of not being able to trust our government (wonder why?) with all the above remarks. Why can’t all of us put our collective brain power together and come up with a solution instead of waiting on either political party to solve our problems? We have to have renewable energy, we need light rails to move around our cities with and we need to get out of our SUV’s, roll up our sleeves and figure this out!
By Joe
June 19, 2008 5:03 PM | Link to this
Jay is missing the point. Sending US dollars to foreign countries for oil reduces the value of our dollar. Reduction in the value of the dollar results in a lower standard of living. Additionally, we need the ability to meet a higher percentage of our oil requirements as a hedge against foreign countries reducing oil exports for political reasons.
By Skeptic Tank
June 19, 2008 5:03 PM | Link to this
Jasper
Please allow me to discern the thesis of your rant from the rest of your rant:
Anyhoo, opening up ANWR, coastal, and shale exploration will send a strong message to our Arab butcher buddies, and they will lower prices immediately. They’re not the sharpest tools in the shed either.
Is that the best you could come up with? Is that the product of your conservative, private school education, the investment of tens, if not hundreds, of thousands of dollars of your parents’ hard-earned wages?
Jasper, you may want to look in the mirror before casting aspersions.
I bet the “Arabs” would laugh you out of the room with your bigoted assessment of their intelligence. You’ve got to learn your multiplication tables before you brag about your talents at calculus, pal.
By joe
June 19, 2008 5:14 PM | Link to this
let gas prices stay high. at least now you can look at all the annoying SUV driving idiots and know they are taking it up the a$$ every time they have to get gas.
hahahhaha!!!!!!!!!!!!!!!!!!!!!!!!
By jasper
June 19, 2008 5:21 PM | Link to this
skeptic tank, can’t help but notice how appropriate that sounds compare to say, think tank.
Still waiting for your discerment. It seems that all you really expressed was your anger. Here’s some more math for you. Anger has a direct inverse correlation to Logic. Thanks for proving.
And funny thing about the Arabs, they take credit for inventing Algebra. Of course they actually stole it from India on one of their rape and pillage conguests during the 8th century.
By WillM
June 19, 2008 5:26 PM | Link to this
Wow, Jay, I think you’ve actually done it this time. You’ve absolutely silenced the opposition! I had to read down well past a dozen posts to even get close to an L-word-wielding, know-nothing rant claiming you’re a degenerate pinko out to corrupt American values with your socialist diatribe. Good job, Jay!
By jasper
June 19, 2008 5:28 PM | Link to this
Joe, laugh on, just remember, these high gas prices will be cutting in to your pizza delivery tips.
By Skeptic Tank
June 19, 2008 5:29 PM | Link to this
Jasper
What I expressed was not anger. I simply pointed out that your diatribe against “libbies” was rife with impertinence and lacking in factual support.
Which was the point of Mr. Bookman’s blog in the first place.
By Ed
June 19, 2008 5:31 PM | Link to this
You are right lets do nothing, that will work for sure. I will put a sail on my Civic and hope its windy. I hope Obama gets us going in the right direction since alternative fuels, solar, and wind are the immediate sure thing.
By jasper
June 19, 2008 5:45 PM | Link to this
Sorry, i must have confused anger with wealth envy.
The facts here are that Jay Bookman is a far left liberal journalist,(all redundant apologies), working for one of the most liberal editorial staffs in the free world. His point or more accurately opinion is so imbued with his political agenda that it not only strains but offends credulity.
He then states postulations from a Federal Agency created by the Carter Administration for a scenario that is 10 years out. And these are facts?
Marta may be working for you. I’ve got higher aspirations.
By CJ
June 19, 2008 5:58 PM | Link to this
Marie said: “…the current policy that Obamacrats support of not drilling…will not do one thing now or in the future to bring down the price of gas.”
A little bit of info for Marie. The policy of “not drilling” is not that of the Obamacrats (so-called). It’s the policy of the oil companies.
Big oil has leases for over 90 million acres of federal land with access to oil reserves (onshore and off). They’re only drilling on about 25 percent of these leases (yes, they have the refining capacity). Democrats in both the House and Senate have introduced “use it or lose it” bills ordering big oil to either get to drilling or lose the leases they have. No point in offering more leases, especially ones in environmentally sensitive areas, if they’re not using the ones they already have.
The “Dems won’t let us drill” con is exactly that (you can’t spell conservative without the “con”).
By WillM
June 19, 2008 6:24 PM | Link to this
Jasper,
You call Jay Bookman “a far left liberal journalist” and say of the AJC that it has “one of the most liberal editorial staffs in the free world”. Wow, my friend. Whether you agree or disagree with him, Jay is about is moderate as commentators go. But I think I know what irritates you so much. For you, moderate would mean playing the journalistic lapdog game of ‘he said/she said’ which simply takes the most ridiculous claims of either side and marking a line right in between them. What actual journalism should do — what Jay does — is ruthlessly rip off the ideological sham that politicians hide behind. Classic example: the hare-brained and manifestly cynical excuse for an idea put forward by Bush to drill in ANWR. (Btw, to show you it goes both ways, lets go ahead and say it: Hillary Clinton and her gas tax idea was just as ridiculous.)
By songbird
June 19, 2008 6:31 PM | Link to this
I’m for the liposuction idea. We’ve got more obese people per capita than any other country in the world, so we would have a monopoly on that source. LMAO!
By Ron
June 19, 2008 6:44 PM | Link to this
This kind of “logic” is why the newspaper business is in decline and will soon be defunct! Your “facts” are opinions and are not supported by any expert in the field. You would make a splendid politician.
By hounddog
June 19, 2008 7:02 PM | Link to this
Let’s see, the law of supply and demand has ceased. You say more supply of oil will not help at all.
So I guess more supply of water for Atlanta will not help either. I guess all ya’ll in the metro area just need to conserve and drink less because according to your logic piping water to add to the supply will not help any more than piping oil will help.
Confusing…
By BW
June 19, 2008 7:08 PM | Link to this
It amazes me that the right is always for one solution that is always correct and the only one that is. As the oil companies are those which are the ones engaged in drilling it is they who are not drilling…primarily because of the economics. It’s cheaper to continue to tap existing oilfields than bear the capital costs of exploratory drilling, new drilling equipment, etc. I further disagree that corporations will simply fold given new costs of business…if Ford tomorrow doubled their fuel economies on their vehicles they would quickly corner the market on all new vehicle sales regardless of the price of oil. I simply believe that the free market will only promote that which allows for the highest profit margin…it is incapable without regulation of foresight into what is best for the long term. Forgot the windfall profits tax…simply end all corporate welfare afforded the oil companies and provide it to emerging alternative energy companies and industries. Mandate fuel economy improvements in all new vehicles. The continued belief that we are entitled to static, low prices will continue to guide us down this road of failure and continue to saddle our children with the costs.
By jasper
June 19, 2008 7:10 PM | Link to this
ok, WillM,
When is the moderate Jay going to ruthlessly rip off the sham of Earmark Obama and his strategy of having no position and simply running on popularity.
Doesn’t the lack of scrutiny towards Earmark-O,by a commentator as insighful and brilliant as Jay pique your curiosity on the subject of journalistic integrity.
Moderate to me means someone who mistrusts the government only 50% of the time.
You should go pick up Jay’s cleaning now.
By Brian
June 19, 2008 7:15 PM | Link to this
You are all parrots.
By f(x) = 36x^2
June 19, 2008 7:40 PM | Link to this
Amazing…presented with actual facts, the right-wing uneducated sheep continue to bleat about supply-and-demand (when their understanding of this economic concept is rooted in fifth-grade generalization) and “suppression” by the federal government.
Here we go, children. And just for the record, I’ve got an MBA, and am a PhD candidate in International Business, so I DO actually understand what I’m talking about.
First - the fundamentals of supply-and-demand do not support current per-barrel prices in the commodities market. They simply do not. Every reputable oil-industry economist will tell you that the so-called burst in demand for oil absolutely DOES NOT impact current supply. At best estimate, supply-and-demand economics support a price-per-barrel of about $50.
Second - the lack of new refineries and drilling in currently sanctioned locations is not the fault of the federal government - it is the fault of the Oil companies. Up-front initial capital and long lead-times for new production are both so high that the oil industry has been unwilling to take a chance on sites that may or may not produce viable sources of oil.
Third - the figures on drilling in ANWR and other areas are spot-on. EVERY legitimate estimate suggests that the US would see ZERO gains in production for at least a decade, if not more, and that those gains, even if realized, would represent a tiny fraction of overall oil production. Are you honestly so stupid as to believe that we would see ANY impact on current gas/oil prices from an endeavor that requires at LEAST a decade to come to fruition?
My god…y’all are so stupid it makes me cry. Look at ACTUAL issues, not those that the radio talk show hosts convince you are important.
By Brian
June 19, 2008 8:09 PM | Link to this
Mr. (left-wing) PHd,
Maybe you can explain to Jay and the audience why a 1% reduction in the price of a barrel of crude does not equate to a 1% reduction in the price of a gallon of gasoline.
ANWR would produce enough oil to >lower the world price of oil by >about 1 percent. So if gasoline is selling at $5 a >gallon in 2030, that would amount >to 5 cents a gallon.
By ron
June 19, 2008 8:34 PM | Link to this
Tomorrow morning,or at least no later than next Wednesday,someone needs to get out of bed and resolve to build a number of nuclear power stations to supply enough electricity for a large number of short range,100miles,pure electric cars.Gm is going to build 100,000 hybrid electric vehicles to be available in 2012.Ford has already built,tested,and recalled a number of pure electric Rangers.These had a range of 65 miles.The technology is there for the electric vehicle.This will dramatically lower our dependence on oil.This can be done now.If it isn’t done now,there is a danger,like before,that we will become complacent and do nothing.Just think where we’d be if we had started in the 70’s.
By Brian
June 19, 2008 8:40 PM | Link to this
p.s. Idiots,
6 hours ago NEW YORK (AFP) — Oil prices slumped Thursday after Saudi Arabia said it planned to boost daily output by 200,000 barrels The benchmark oil futures contract, New York’s light sweet crude for July delivery, slid 4.75 dollars to close at 131.93 dollars a barrel.
Even without a PhD I can do the math on this one, 4.75/132=.035 == 3.5%
Oh My!! The mere mention of increase in production of 200,000 barrels sent the price DOWN 3.5%! How is that “no discernible impact”?
I don’t know if drilling in ANWR is a good idea. I do know that if I was looking for oil, I wouldn’t ask a bureaucrat (democrat or republican) where to find it.
By Christian
June 19, 2008 8:49 PM | Link to this
This is one of the most ridiculously unfair treatments I, a legal immigrant, who have lived in this country for more than eight years, have experienced. I recently sadly found out that I didn’t qualify for the stimulus rebate check because my wife, whom I always file a joint tax return with, doesn’t have a social security number. So, because she has a tax ID (She is on an H-4 visa, then not allowed to work, which I also do not understand, but anyway …), but not a SSN, I and my three young children, two of whom are American citizens, are denied the rebate check. I found this really hard to swallow. But, will anybody care? Will my complaint get anywhere? If it does, thank God; if it doesn’t, no matter. I have learned, over my eight years here, to live with so many other unfair treatments we, LEGAL IMMIGRANTS, experience at times. Anyway, I am just an immigrant, so who cares?
Christian G Atlanta, GA
By ByteMan
June 19, 2008 8:53 PM | Link to this
Brian @ 8:09: Because the price of oil is only a percentage of the total price of a gallon of gasoline, a 1% reduction in the price of oil won’t provide a 1% reduction in the cost of gasoline. I don’t have the specifics on it, but it seems logical that there’s at least 40% of the cost tied up in things like labor, transport, the refinery itself, refinery profit, etc.
And although annoying in tone, f(x) is correct in his/her assessment of the situation. Oil and many commodities are in a bubble right now, some (but not all) of it driven by speculation. All bubbles eventually pop.
But that doesn’t mean that we have enough oil to meet future demand. As I mentioned earlier, Mexico is about to become a net importer. Russia has also admitted recently that they may have passed Peak Oil for their territory and will become a net importer in about 8 years. Oil fields run dry. We need a better plan than to keep drilling.
By f(x) = 36x^2
June 19, 2008 8:55 PM | Link to this
Sigh…apparently the emotional impact of spikes in production mean nothing to you…
Yes…when OPEC announces an increase in production, there is going to be a change in immediate pricing. Does that mean that long-term pricing is affected? No…it doesn’t.
And seriously - a FIVE-CENT decrease in gas prices TWENTY-YEARS from now means something to you? REALLY?
And it’s not “ANWR drilling WOULD decrease prices”, it’s “ANWR drilling MIGHT decrease prices” (by a very small fraction), dependent upon many variables, including the overall capital investment required to realize the projected increase in production, the ACTUAL increase in production that MIGHT be gained from ANWR drilling…
Seriously…if you think that our best bet to decrease energy costs rests in a decades-long gamble…then you are truly the idiot I named you.
And SOO funny, the “left-wing” moniker from a previous poster. Time to wake up and realize that ideology has very little to do with the actual functioning of business. We care about RESULTS, not ideology. And the RESULT of ANWR drilling has zero to do with current prices OR the relative future prices of oil drilling.
By Brian
June 19, 2008 9:19 PM | Link to this
ByteMan and f(x).
Clearly you both missed my point, and I am not surprised by the name-calling from an “educated” person like yourself.
1) I was quoting the Article which posited that a 1% change in the price of oil would produce an equivalent 1% change in the price of gasoline. Clearly an erroneous statement as even a PhD in international business knows that gasoline is only one of many products which are produced from oil and as ByteMan concurs there are other costs involved in producing gasoline. So again, my point was that the author is incorrect in assuming that a 1% change in the price of a barrel crude oil today or 30 years from now would correlate to a 1% change in a Galon of RBOB (that’s gasoline to you PhD’s).And I was quoting the author directly who stated “ANWR would…”
2) “Emotional impact” is my exact point. The price of a barrel of oil is clearly disconnected from the fundamental supply and demand (we agree on that) - but you can’t have it both ways in saying that today price is an irrational reflection caused by speculation AND tomorrow it will be higher because demand outstrips supply. You probably don’t get that point either… let it simmer. The price is determined today and tommorrow by perception and emotion of the traders in a FUTURES MARKET as much if not more than any underlying supply or demand.The truth is NOBODY knows how much oil is under the earth, and NOBODY knows how much oil we will need in the future and NOBODY knows what determines the price of oil (no matter how many letters next to their name). This is all foolishness and you are the parrot I named you.
f’(x)=72x
By Hillbilly Deluxe
June 19, 2008 9:26 PM | Link to this
I don’t think Jay is a moderate; I think he’s a liberal but thats ok he’s entitled to his opinion.
If anybody sees Sonny how bout asking him where my state Income Tax refund is?
By AL
June 19, 2008 10:16 PM | Link to this
It reduces our dependency on foreign oil. What planet are you on? You take facts and cherry pick them to fit your left wing wacko theories. Thank goodness the only you’re in charge of is a liberal blog. If we add domestic oil into the world market we CAN reduce our dependency on Chavez and his ilk. China is drilling in the Gulf of Mexico while we fret over ANWR. Are they worried about regulations? WISE UP!!!
By f(x) = 36x^2
June 19, 2008 10:47 PM | Link to this
I don’t remember saying that tomorrow’s price wil be higher because demand suddenly outstrips supply…
I simply said that it is irrational to suggest that a decision today to allow drilling that will not result in a net-gain of production for over a decade will impact current oil prices - or gas prices. There is also no way to gauge impact of such production on prices far into the future.
The United States is currently the third-largest oil-producing country in the world…beneath Saudi Arabia and Russia…the BEST ESTIMATES of production from ANWR would not move us up in that ranking. We would STILL be number three. Exactly HOW would that decrease our dependance on foreign oil?
Oh My!! The mere mention of increase in production of 200,000 barrels sent the price DOWN 3.5%! How is that “no discernible impact”?
Do you know what the word “ephemeral” means? Futures markets are about as reliable a source of information about the TRUE impact of production as Austin Powers is a true example of how a spy works. Long-term changes are the only true measure of the value of a commodity. There is no doubt in my mind that oil prices will eventually return to a more reasonable level given the fundamentals. If anyone doesn’t “get it”, it’s you…not me. However, that’s not going to help cushion the immediate effects on the economy, and NEITHER WILL DRILLING IN ANWR.
But please, continue to ridicule education - it’s what I expect from anti-intellectual ideologues.
(f)”X = 72.
By Eric
June 20, 2008 12:17 AM | Link to this
We need even more comprehensive planning, such as population control. We could also do with less technology (all the unnecessary gadgets purchased by power-hungry consumers) and all of the plastic packaging everywhere. With oil demand increasing globally, doesn’t it make sense to curb demand in our lifestyles - and the number of people added to the earth - at the same time we transition to alternative fuel sources?
By Jack
June 20, 2008 1:18 AM | Link to this
People advocating drilling are delusional. The amount of known reserves would last us at our current rate of consumption 1 to 2 years. Yep, that’s it. Oil doesn’t just go into you tank, it goes into just about every product including the windmills and solar panels we need to get off of our oil diet.
Drill in the deep ocean takes oil powered machinery. For the amount of energy expended the amount of oil pumped is not that much more. It’s not worth the expense.
Same with Shale and oil sands. You have to mine the stuff. That means powering all those bulldozers, dump trucks and heavy equipment. There is very little energy gained as to what is expended.
Nuclear may not be the answer either. You have to mine Uranium. Most of that comes from South Africa or Australia. Another finite resource to rely upon and another one that requires alot of oil powered machinery to extract from the ground.
Oil is finite. We will soon not be able to pump out enough to meet our demands. We need to prepare for a world where we use all sources of energy. Wind, solar, hydro, etc.
We need to learn to be happy driving smaller cars. It sure beats driving SUV’s today then having go walk tomorrow when there isn’t enough gas to go around! People complaining about $4 gas while driving a big SUVs and pick up trucks are hypocrites (unless you use it regularly to haul a large family around). We knew in the 70’s we would run out of oil one day. But it got cheap again and we bought big cars and SUVs because we could.
It’s no different than the water supply issue in Atlanta. We went through a drought situation in the late 80’s and it was known then that we needed to take action. But then it rained and the drought went away. Well it came back and we still had not done anything.
We need to act now and in a drastic way. Gas is only going to get more expensive and with it, everything that relies on oil.
By Ben
June 20, 2008 3:55 AM | Link to this
You need to understand that the price of oil today is so high due to the price of oil futures. Oil futures are based on assumptions about FUTURE supply, and opening up billions of barrels of oil to extraction cannot help but affect future supply.
Furthermore, you are completely neglecting the beneficial effect on our economy of all those oil dollars coming to the US instead of going to the Middle East or wherever else they are sensible enough to make use of their natural resources.
But favoring drilling for our own oil in no way means I am not also in favor of seeking alternative energy sources. A lot of people seem to think that favoring drilling means you are against seeking alternatives. That’s ridiculous. Just because drilling won’t solve the problem long-term doesn’t mean we shouldn’t do it for the short term. Especially as it seems the environmental impact is greatly exaggerated by its opponents.
By DMac
June 20, 2008 6:37 AM | Link to this
Missing from this discussion and from our presidential candiates remarks on this issue, GLOBAL WARMING.
Why promote more drilling when we know that more oil production will encourage more oil consumption. More burning of fuels, more pollution, more CO2, more global warming.
We’ve got to power our world without creating large amounts of CO2 in the process.
By Tommy Maddox
June 20, 2008 7:18 AM | Link to this
The US should not be hamstrung by the Middle East. If we become self-sufficient as in increasing our own oil drilling in an exponential manner in areas with known oil deposits, you’ll see present prices drop.
Since he is not interested in increasing oil production, I suppose we’ll all be receiving a Toyota Prius if Obama gets elected.
By bobfromCanton
June 20, 2008 7:38 AM | Link to this
Byteman, following your logic about the 8-10 years, maybe Billy Clinton should have approved ANWR drilling when he had the chance! This business of continually putting something off till later is what got us into this mess. We need a comprehensive plan that covers drilling, conservation, alternative fuels, nuclear power, etc. I am certain that the left wing and the environmentalists won’t be happy until we have nothing to run our country! No more cars, no more electricity, no more anything! They will only be satisfied when we all live in caves, huts or whatever.
By Copyleft
June 20, 2008 8:04 AM | Link to this
Jasper:
Developing alternatives, fuel-efficiency standards, and conservation to reduce demand would send an even STRONGER message to the Middle East, don’t you think?
It would say “We don’t even CARE about oil any more. Your only leverage is now gone.”
By BW
June 20, 2008 8:15 AM | Link to this
As Herman Cain says…you just might learn something
http://www.time.com/time/business/article/0,8599,1815884,00.html
By Tim P
June 20, 2008 10:19 AM | Link to this
The additional ANWR oil may not bring down prices but it’s oil that we are producing and not importing from other countries, sometimes hostile countries. At $125.00+ per barrel and an estimated 1M barrels a day it adds up to $40-45B a year. That’s money that stays in this country and at the same time we produce more jobs. Job creation by drilling in ANWR is estimated at between 250-750,000 jobs. Whatever the cost savings, let’s produce our own oil.
By ByteMan
June 20, 2008 10:21 AM | Link to this
bob@7:38: you’re not really following my logic and your rant just makes you sound like a dumb partisan who listens to talk radio instead of researching the problem for himself.
Five years ago, I wrote in my political blog (now dormant) that we should drill in ANWR, but that it would only help replace what was being lost at Prudhoe Bay, not as a strategy for energy independence. The spike in energy prices hasn’t changed my mind on that.
The problem here is that the “drill first, let the marketplace work out the rest” crowd are the ones whistling past the graveyard. The oil folks get HUGE tax and lease breaks from the Feds. Alternative energy companies — especially solar, nuclear, and water — should get BETTER treatment than the oil companies, since we’re now clearly aware that cheap oil is not our friend. Give them all the support and breaks in the world to get going… THEN let the marketplace figure out which one is the best solution. I’d rather focus on finding a market leader for the next-generation power supply than worry about the slow decline of the current generation market leaders.
By mike
June 20, 2008 10:34 AM | Link to this
This just goes to show the ignorance of this author. If it were not for the current US and Canadian oil production we would be paying prices simular to what they are in the UK.
How about $11.00 per gallon instead of $4.00.
We certainly need to get off of the oil bottle, but we don’t need to sit on our duffs as Jay suggests and do nothing.
But then again this is just another assinine artical brought to you by the AJC!
By TPA
June 20, 2008 11:14 AM | Link to this
Mike,
the UK gas price is higher because of gasoline taxes. In fact, as opposed to the US, the Brits are net exporters of oil.
I think the rest of your post speaks for itself…
By TPA
June 20, 2008 11:16 AM | Link to this
Mike,
the UK gas price is higher because of gasoline taxes. In fact, as opposed to the US, the Brits are net exporters of oil.
I think the rest of your post speaks for itself…
By bill
June 21, 2008 2:44 PM | Link to this
I have lived on the coast of santa barara and ventura for the last thirty years. There are oil rigs off our coast. they are so ugly that no one wants to live or vacation there . beach house prices have plummeted to only 3 million dollars+ and vacation rentals are only $2500+/wk. this has completely devastated the area. 800 sq ft homes are down to $500,000+. Its so bad that Oprah would only spend 50 million for her estate here. There are FEDERAL oil leases to drill 3 miles off the coast the oil companies can build rigs out there, however the local governments state, county, city,coastal commission ,etc. will not let them run power to them , operate support vessels, or build pipelines. But wait it gets better. There have been 3 proposals for LNG transfer stations up to 14 mi. off the coast. We (the local governments) don’t want them. There was a proposal to build wind mills 50 mi. inland , locals didn’t want that either. There are currently 4 proposals for wave technology , that have not been studied or tested yet but there are already 2 lawsuits against them. See we know there is some great new technology out there that is completely safe, that we don’t have to look at , smell or fear as long as its not HERE. So we gladly pay $4.70+/gal gas, $5+/gal diesel , have tiered electric rates among the highest in the nation. I’m so glad the local liberals have been doing so much to help the little guy. There are no words that can completely express my gratitude
By itsalljustaride
June 22, 2008 1:25 AM | Link to this
It’s pretty obvious most of the detractors here didn’t even read past the first paragraph of this article.
These are basic economic principles we’re talking about here.
“There is no hometown discount” should be the litany of everyone who hears “DRILL NOW! DRILL HERE!”
By Freedom Now
June 25, 2008 10:18 AM | Link to this
Lets say all of a sudden oil is discovered in a country and the capacity equals Africa’s largest oil producer and OPEC founding member, Nigeria, at about 2.5 million bpd.
Do you think that would lower the price of oil?
Before you answer, think about the fact that every time rebels in Nigeria attack an oil facility the price of oil goes up.
Anyway, thats about how much oil can be produced from currently restricted offshore and ANWR sites.
You guys are only kidding yourselves.
More oil drilling means more oil on the market.
More oil on the market means lower prices.
No amount of double think can change that.
By Howard
July 24, 2008 3:15 PM | Link to this
America’s infrastructure is based on oil. All the trucks, planes, trains, ships, that deliver all goods to market run on oil. All automobiles, as well as all the gas stations across America run on oil. All petroleum based products, run on oil. Although alternative fuels most definitely should be developed, in the mean time America must have oil to keep our economy from screeching to a halt. In addition, our national security requires energy independence ASAP, so that we are not transferring all our wealth to foreign countries who do not like us, and who can cripple us by turning off the spigot, disrupting oil transport to us, or arbitrary oil price hikes. These are all reasons why we must be drilling for more oil right now and right here in the U.S.A. … ASAP. Nancy Pelosi and her cronies stubborn commitment to petty party politics, instead of realistic concern over our national interest, even in the face of 76% of Americans who want off shore drilling now, will end up in bringing America to its knees.